Nelson B. Allen

NELSON B. ALLEN 229 WE WILL notify The Colonial Painting Company , Inc, in writing, that we have no objection to and will not interfere with its employment of John J. Pike. WE WILL make John J. Pike whole for any loss of earnings he may have suffered because of the discrimination against him. PAINTERS DISTRICT COUNCIL No. 4, BROTHERHOOD OF PAINTERS, DECORATORS & PAPERHANGERS OF AMERICA, AFL-CIO, Labor Organization. Dated------------------- By------------------------------------------- (Representative ) (Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced , or covered by any other material. Employees may communicate directly with the Board's Regional Office, Fourth Floor, The 120 Building, 120 Delaware Avenue, Buffalo , New York, Telephone No TL 6-1782, if they have any question concerning this notice or compliance with its provisions. Nelson B. Allen and Line Drivers Local 224, affiliated with Inter- national Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America. Case No. 21-CA-5051. Octo- ber 29, 1961 DECISION AND ORDER On May 19, 1964, 'T'rial Examiner Louis S. Penfield issued his De- cision in the above -entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take cer- tain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent and the General Counsel filed exceptions to the Trial Examiner's Decision and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers herein to a three- member panel [Chairman McCulloch and Members Fanning and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the 'Trial Examiner's Decision, the Respondent's and General Counsel's 'exceptions and briefs, and the entire record in this case , and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the Board hereby adopts, as its Order, the Order recom- mended by the Trial Examiner and orders that the Respondent, his officers, agents, successors, and assigns, shall take the action set forth in the Trial E xaminer's Recommended Order. 149 NLRB No. 27. 230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE This proceeding with all parties represented was heard before Trial Examiner Louis S. Penfield in Los Angeles , California, on October 7, 8, 9, 10 , 11, 29, and 30, 1963, upon a complaint of the General Counsel and an answer by Nelson B. Allen, herein called Respondent . y The issues litigated were whether Respondent violated Section 8(a)(1), (3 ), and (5 ) of the National Labor Relations Act, as amended, herein called the Act. Upon the entire record, including consideration of briefs filed by the parties, and upon my observation of the witnesses , I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Nelson B. Allen is an individual proprietor engaged in the business of hauling freight with trucks of the tractor-trailer combination type, and in the leasing of such equipment. His principal place of business and his truck terminal are located at Montebello, California. In the course and conduct of such business during the calendar year 1962 Respondent received in excess of $80,000 for leasing truck equipment to Waste King Corporation and Thrifty-Mart Inc. Waste King Corpo- ration is engaged in the manufacture of disposal units, dishwashers, and stoves, and during the calendar year 1962 shipped its manufactured products, valued in excess of $50,000, to points located outside the State of California. Thrifti-Mart Inc. operates a chain of retail markets in Los Angeles and vicinity as well as in Las Vegas, Nevada. During the calendar year 1962 Thrifti-Mart Inc. did an annual volume of business in excess of $1,000,000, and transported commodities valued in excess of $50,000 from Los Angeles, California, to Las Vegas, Nevada. I find that at all times material to this proceeding Respondent was engaged in a business which affects commerce within the meaning of the Act and that the asser- tion of jurisdiction is warranted. It. THE LABOR ORGANIZATION INVOLVED Line Drivers Local 224, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Prefatory statement The central issue in this proceeding relates to a series of unfair labor practices alleged to have been engaged in by Respondent when confronted with demands by the Union as the statutory representative of its employees. The General Coun- sel asserts, in substance, that Respondent discriminatorily terminated the employ- ment of certain of its employees because of their efforts to bargain through the Union, thereby refusing to bargain, and thereafter refused to reinstate such em- ployees, and continued in its failure to fulfill its statutory bargaining duty. Re- spondent insists that at all times it bargained with the Union as required by law, and that the terminations were a lawful response to an unreasonable demand by the Union which, in any event, were remedied by subsequent offers of reinstatement. Nelson B. Allen is engaged in a specialized branch of the over-the-road truck- ing industry. In the fall of 1962, Allen owned 12 tractors and 10 trailers, and conducted his business from a small terminal comprised of an old house, and a lot upon which trucks could be parked. Most of the equipment was secondhand and ranged in value from $6,000 up to $13,000 for each individual piece. Ap- proximately 25 percent of Allen's business was in leasing equipment to other haulers who operated it with their own drivers. The remainder of the business was comprised of what is known as subhauling. i The complaint issued on June 17 , 1963, and Is based upon charges and amended charges filed with the National Labor Relations Board, herein called the Board, on November 8 and December 11 and 12, 1962, respectively. Copies of the complaint, the charges, and amended charges have been duly served upon Respondent. NELSON B. ALLEN 231 The major portion of over-the-road freight is hauled by so-called prime carriers who deal directly with their own customers and haul their goods and products at fixed rates. Prime carriers, however, due to cost problems or shortage of equip- ment, often requite additional trucks to fulfill contracts with their customers. To meet this need they may engage the services of subhaulers to furnish equipment and drivers. The rates of this hue will be fixed by contract between the subhauler and the prime carrier. This may be a flat fee per load, or be a percentage of what the prime carrier receives from his customer. In any event, the subhauler will receive less than the amount which the prime carrier gets, and from his fee the subhauler must pay the drivers, pay his overhead costs, and make his profit. For the most part, subhaulers are unable to get prime haul business which is more profitable, because they cannot afford the equipment and the high overhead needed to provide the regular service. There are numerous subhaulers in the Los Angeles area. Many have less trucks than Respondent, others have considerably more. The subhauling business is admittedly a highly competitive one. In the western part of the United States most of the prime carriers are parties to a collective-bargaining agreement with Western Conference of Teamsters. This master agreement was negotiated between the Western Conference of Teamsters, acting on behalf of various locals in the Western States, and various employer trucking associations representing employers in the same area. The master agreement, of course, binds the association members. In many cases the master agreement is submitted to and signed by individual employers in the same area who are not members of the employer associations but who thereby will also become bound by it. Although some truckers, who are primarily subhaulers, are also parties signatory to the master agreement, most of the subhaulers are not organized. It is acknowledged that the master agreement was designed primar- ily to apply to the businesses of prime carriers and not to those of the subhaulers. In the conduct of his business Allen regularly employed from 10 to 12 driv- ers. His practice was to assign men to loads as obtained, on a rotary basis making use of a first-in first-out principle. They were paid hourly rates and received fringe benefits less than those accorded by the master agreement. The drivers regularly drove a single piece of equipment, and were usually notified of assignments either by telephone or by checking at the terminal. Sometimes word of an assignment would be relayed by fellow drivers. In the year 1962 Allen did a gross business of $250,000. His net profit for the same period was $14,000, which allowed no salary either for himself or his wife. The events with which we are concerned in this proceeding fall into two broad categories: (1) the organization, the bargaining attempts, and the events both preceding and including November 6, 1962; and (2) the offers of reinstatement and the bargaining occurring subsequent to November 6, 1962. B. The organization, the bargaining efforts, and the events both preceding and including November 6, 1962 1. The organization of the Union, the majority, and the appropriate unit Union organization of Respondent's employees commenced in late October 1962. The instigator was driver John Frederitz who approached Union Business Agent Sid Wasson on October 22, 1962, and obtained from him union authoriza- tion cards.2 A day or two later Frederitz, met with drivers Gene Pennington, Claude Beauchamp, and Ronald Rowley. At that time these drivers and Frederitz signed authorization cards. Driver Melvin Graham signed an authorization card "around the date of the 25th." Driver Richard Hinrichs signed a card on Octo- ber 26. Driver Kenneth Lundy testified, without contradiction, that he signed a card "somewhere between the 21st and 26th" but that he did not give it to Frederitz until approximately November 2. Frederitz gave all of the signed cards, except that of Lundy which he did not receive until later, to Business Agent Wasson on October 26. All cards are dated October 20, 1962, which was a date agreed upon among the employees to be used uniformly to avoid any possibility of discrimina- 2 These cards were in the form of an application blank which provided, among other things, that the signer was applying for admission to membership "and [designating] said above Union as [his] exclusive representative in collective bargaining in regards to wages, hours, conditions and for a UNION SHOP working agreement." Respondent contends that application cards should not be construed as "automatic representational authoriza- tion." It would appear that the quoted language would negate such a contention, and I so find. 232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion against the first signers. The authorization cards for seven drivers, Frederitz, Beauchamp, Rowley, Pennington, Graham, Hinrichs, and Lundy were received in evidence after identification by the drivers themselves, or by someone who had observed the drivers sign.3 I find that by October 26, 1962, the seven drivers of Respondent above listed had designated the Union as their statutory representative. Respondent and the General Counsel agree that a unit of Respondent's drivers may be appropriate They also agree that drivers William Timmons, Robert Brooks, Gene Pennington, Gene Creech, Ronald Rowley, John Frederitz, Claude Beauchamp, Melvin Graham, Richard Hinrichs, and Kenneth Lundy should be included in such a unit Respondent would also add drivers William Sharp and Robert Adams to this group. The General Counsel, although at first disputing the inclusion of Sharp, now acknowledges that Sharp was driving at the time of the events in question, and that he is properly in the unit. Robert Adams was not working for- Respondent in October, but formerly had driven for Allen • The record shows, however, that Adams had left Allen's employ in July 1962. Respond- ent claims that Adams was on leave of absence and that he should be accorded employee status. It appears, however, that Adams left Respondent's employ to take employment in another city, and that he was still employed there at the time of the events with which we are concerned and did not return to Respondent's employ until the spring of 1963. While no doubt Respondent regarded Adams as a good driver that he would have reemployed, I am not convinced that Adams enjoyed any special status which would qualify him as an employee in October 1962. He left Respondent's employ to suit his own convenience, and appears to have returned for the same reason at a considerably later date It is not shown that Respondent was holding a place for him or that he could have' returned at any time regardless of existing vacancies. ' I find that at all-times pertinent to the issues in this proceeding Robert Adams did not have employee status, and cannot be considered as a part of the appropriate unit. I find further that a unit of all Respondent's drivers constitutes a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act.4 Since I found above that by October 26, 1962, 7 of the 11 drivers in the unit had designated the Union as their statutory representative, I find that at all times since October 26, 1962, the Union has been the exclusive representative of Respondent's employees in an appro- priate bargaining unit within the meaning of Section 9 of the Act 5 2. Interrogation and bargaining efforts prior to November 6, 1962 ' Allen first learned of the organizational efforts of the Union in a telephone call from Wasson which he places as occurring on October 29, 1962.6 In this call Wasson advised Allen that "he had a majority of the drivers signed up and that he wanted to come out and discuss the signing of the contract with [Allen] " Noth- ing more specific was discussed at this time. According to the credited testimony of Allen, a meeting between him and Wasson was arranged for Wednesday, October 31. Following this telephone conversation, Allen talked with several of the drivers concerning the Union. Allen asked Frederitz if it were true that the men had organized and "who was behind it." Frederitz told Allen that it was true, but declined to tell him who was responsible. Allen went on to tell Frederitz that he "would not do business with the Union," that he "could not afford,it," and finally stated. "Well I will shut the doors before I do business with the Union." Accord- ing to Hinrichs, Allen told him on one occasion that "somebody figures they are going to fix me with this union deal and I am going to do a little fixing myself." On another occasion Henrichs states that Allen told him, that he had asked all the drivers if they had signed cards but that all had denied it. Follow- ing this, according'to Hinrichs, Allen with a show-of anger, said, "I,got a bunch of liars working for me" Allen also had a conversation with driver Graham in In its brief Respondent erroneously asserts that only six cards were offered in evidence. The record also establishes that,on November 4, driver Gene Creech-signed a card. Creech, however, never turned in his card to the Union, and it is not urged by the General Counsel that it be counted for the purpose of determining the majority. 4 This unit is comprised of the following 11 employees • Timmons, Brooks, Pennington, Creech, Rowley, Frederitz, Beauchamp, Graham, Hinrichs, Lundy, and Sharp 5 Even if Adams be considered within the unit, it will be comprised of only 12 drivers. The Union thus would still have a majority at all material times 0 Wasson would place the call a few days earlier, but I am convinced that Allen's recollection in this regard is the more accurate. NELSON B. ALLEN 233 which he asked Giaham if he had signed a union card, and told Graham that he could not afford a union. The foregoing conversations are acknowledged by Allen to have taken place, although he differs in details and emphasis. He denies that he specifically threatened to go out of business, but he admits that he may have said that if the contiacts were forced on him he might have to do so. He does not recall telling Hinrichs that he was going to do some "fixing himself," and supports his recollection by stating that the Union would appear to be a difficult organization to "fix." He admits asking Graham and others if they had signed the union cards. I credit the testimony of the drivers , and find that the statements attributed to Allen occurred in substantially the manner in which they relate them I find further that by the threats to go out of business and to fix the Union, and by interrogation of his drivers concerning their union affiliation, Respondent has violated Section 8(a)(1) of the Act.7 On October 31, 1962, Wasson and Allen met as scheduled at the terminal Was- son advised Allen that at the time he represented seven drivers." Allen remarked that then he "must have seven liars because nobody ever signed a card," but he did not ask to see the cards or otherwise question that the Union, in fact, did represent a majority of the drivers Wasson presented Allen with a copy of the master contract. There followed an extended discussion of its provisions and of their applicability to Allen's operation. The meeting lasted for several hours and the cost items were discussed fully. Allen insisted that he could not conduct the type of business in which he was engaged and meet the costs required by the contract. Notes made by Allen at this meeting show that health and welfare costs of the master agreement would add approximately $55 a month for each driver, and that the relative cost of what Allen regarded as a typical trip would be increased from approximately $92 to $129 a trip . On an annual basis Allen com- puted that this would have the effect of raising his costs approximately $36,000. He made clear to Wasson that since his net profit was less than half of this amount, he could not live with the contract absent a change in the character of his business . Wasson acknowledges the discussion , and although suggesting that the trips may not have been in all respects typical , does not dispute the general accuracy of Allen's figures. Wasson concedes that at the time he was not author- ized to offer Allen anything but the master agreement . He admits that he did not specifically apprise Allen that by using the services of those in authority in the Western Conference of Teamsters, it might be possible to negotiate a special agreement designed to meet the specialized character of Allen's trucking busi- ness. The meeting concluded with Wasson requesting that Allen give further consideration to the matter. There can be no doubt that Allen accorded the Union recognition at this first meeting, and I so find. Aside fiom that, it appears to have been largely explora- tory in nature, and reveals nothing that would suggest that Allen was not fulfill- ing his statutory duty to bargain . On the other hand, while Wasson indicated that he could only negotiate within the limits of the master agreement , he made no suggestion that can be characterized as an ultimatum, or even as an indication that unless Allen accepted the master agreement he would face immediate economic action . On the contrary this first meeting ended on a conciliatory note with Wasson suggesting that "maybe the boys wouldn't be too hard on [Allen]" and that Wasson would get "in touch with [Allen ] later." Wasson reported the results of his meeting with Allen to Frederitz , and suggested to him that he get the drivers together to ascertain their wishes before he met with Allen again . He reported Allen's economic position to Frederitz , and told him that it was up to the men to decide upon the course of action that they wished to undertake . As a result of Wasson 's suggestion, a meeting of the drivers was scheduled and took place on Sunday , November 4, 1962 , at Hul's Restaurant lo- 7 The questioning did not take place with the safeguards the Board requires As set forth in a recent case , for interrogation to be privileged it must be not only for the pur- pose of verification of a union's majority status , but also must be accompanied by a com- munication to the employee of the purpose , an assurance that no reprisal will take place, and must occur in it context free from employer hostility or other interference with em- ployee rights. Jolirinic's Poultry Co., 146 NLRB 770. In the instant case the purpose was not shown, in no case were assurances of no reprisal given, and in some instances the questioning occurred accompanied by threats to go out of business. 8 While it is true that Lundy's card had not yet been given to Wasson, Frederitz had advised Wasson that Lundy had signed a card. 234 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cated near Respondent's terminal. Driver Beauchamp invited Allen to attend this meeting but Allen told him that since the men now had a representative he did not feel it was appropriate for him to come.9 - This meeting was not attended by Wasson, but all the drivers who had signed cards with the Union were present. It took several hours, and both the contract and its implications with respect to Allen's operations were discussed at length. There were differences of opinion among various individual drivers as to Allen's ability to make concessions, but all the drivers who testified showed an awareness of the economic problems facing a subhauler like Allen if required to live up to all of the terms of the master agreement. All the drivers, however, felt that it should be possible through the Union to obtain some benefits which they did not then have It was the consensus of the group that although literal compliance with all of the provisions of the master agreement might not be possible, some way might be found to avoid strict compliance with its more onerous terms. It was agreed that the issue should be pressed further through the Union, but there was no suggestion that the master agreement was to . be forced on Allen by a strike or picketing. 3. The bargaining meeting of November 6, 1962, and the terminations After the November 4 meeting, Frederitz advised Wasson that it was the wish of the drivers that he press further in attempting to get an acceptable agreement with Allen. Wasson requested that Frederitz undertake, insofar as possible, to get all the drivers who had signed union cards to join him on November 6, 1962, in visiting Allen so that he might have the advantage of their "moral support" and their views. All of the drivers were notified of this proposed meeting, but on the morning of November 6, only Frederitz, Beauchamp, and Rowley appeared at the terminal to meet Wasson. The four of them waited for the others for over an hour but none of the drivers appeared. At approximately 11 a.m. Wasson and the three drivers walked into Allen's yard. Wasson had no previous appointment with Al- len. Allen met the group in the yard. When Wasson suggested that they all go into the office to discuss the contract, Allen replied that it could be discussed in the yard The testimony of Wasson and the drivers is in substantial accord as to what transpired immediately thereafter. According to them, Wasson, who had an envelope containing copies of the master agreement and the various trust agree- ments that are normally signed simultaneously with it, suggested to Allen that he might wish to sign them. Allen replied that, as he had explained to Wasson at the earlier meeting, continued operation under the master agreement was an eco- nomic impossibility. Allen then accused Frederitz of instigating the whole matter and of attempting to undermine him. Frederitz denied the accusation, and he and Allen got into a heated argument . Wasson finally succeeded in calming Frederitz and Allen, and again brought the conversation around to the agreement. Allen then announced that he would not sign it, and that he was out of business. He said that he was firing Frederitz, Beauchamp, and Rowley. Wasson asked him why, and Allen replied that he was firing Frederitz for having drilled holes in his trucks some weeks before without authorization, Rowley for refusing to perform work he had been directed to do, and Beauchamp for lack of work. Allen stated further that he would take care of the other drivers when they arrived. The three drivers thereupon cleaned out their trucks, turned in their keys to Allen, got their paychecks and departed. Allen's version of these events does not materially differ. He states that he had observed Wasson and the drivers sitting in a car in front of the terminal. When they approached him in the yard, he did not invite them into the office because he was expecting some phone calls and wanted privacy. When Wasson asked him' about signing a contract he repeated to Wasson that , as he had told him earlier, it was economically impossible. He admits having a heated argument with Freder-- itz. He does not specifically deny accusing Frederitz of attempting to undermine his operation , but he indicates that the substance of the argument turned on some other matter. He acknowledges that when Wasson quieted Frederitz, he told Was- son that "If he was going to force the contract on me I would be out of business; that particular day there wasn't any business, so in the confusion I laid everybody O When Allen and Wasson first met , Allen suggested the possibility of his meeting with his drivers. Wasson told Allen that the Union was now the representative of the men. It is thus understandable that Allen showed reluctance in response to Beauchamp 's invita- tion. Wasson testified that he would have had no objection to Allen's attending the meet- ing, but it does not appear that he ever apprised Allen of his view. NELSON B. ALLEN 235 off " Responding to Wasson's questioning as to the reasons, Allen states that he "Could add Frederitz for drilling holes in the cab, Rowley because he had refused to work for this one customer up North, and Beauchamp because there wasn't any work." He concedes that when they asked for their paychecks he told them that they could have them if they turned in their keys. Allen specifically denies using the word "fire" in connection with any of the drivers. He admits saying that he would take care of the other drivers "as they came in and lay them off too." I credit the mutually corroborative and consistent testimony of Wasson and the drivers. The principal differences between their version and that of Allen is found in Allen's insistence that he only said he "could have" fired them for alleged infractions, rather than that he did so, and in his denial that he ever used the word "fired." However, if we accept Allen's version at its face value we find him admit- tedly terminating the employment, not only of the three drivers present, but also of all drivers in the unit for no apparent reason but that they were seeking a contract through their statutory bargaining representative. It is undoubtedly true that Allen had no loads to haul on that particular day. It is undisputed, however, that Allen never followed a practice of laying off drivers when work was slack. Work frequently had its ups and downs and Allen regularly undertook to distribute work among the drivers as it became available. In the intervals he did not lay off drivers or asked for their keys. Even the term "layoff" does not accurately express what happened. As Allen himself puts it, confronted with what he regarded as a demand that he sign the master agreement, he determined to quit the subhaul- ing business, at least for the time being, because "frankly at the time I didn't know what else to do." Thus whether Allen's conduct be described as a layoff, a firing, or a termination, by his own admission it was clearly action which he took in response to the Union's demand, and I so find. He followed up his announced plan by terminating the remaining drivers. As they came in from trips or other- wise reported to the terminal at various times during the balance of the day and on November 7 each was told, in substance, that Allen was no longer in business, and that their services were no longer needed. Immediately after the incidents in the yard, Wasson and the three drivers went to Hul's Restaurant to discuss what should be done. There is no evidence to contra- dict Wasson's testimony that he had not contemplated picketing at this time solely for the purpose of pressing for a contract. Wasson states, however, that confronted with terminations coming about in a manner which he regarded as discrimina- tory and unlawful he felt he had no alternative but to take action in protest. After consulting with the Union's attorneys, and discussing the matter with the drivers, picketing was commenced. The picket signs were made up from material which Wasson had in his car, and they were inscribed with the legend "Nelson B. Allen Unfair. Employees discharged for union activities. Local 224." Beauchamp, Rowley, and Frederitz commenced picketing about noon on November 6. They were subsequently joined by drivers Graham, Lundy, and Hinrichs. The picketing continued without interruption until about December 24, 1962, and was later resumed under circumstances which will be set forth below. 4. Concluding findings as to the incidents occurring on November 6 Before we can correctly appraise and understand later developments, we must first consider the significance of the events which happened on November 6, 1962, and immediately thereafter. The background for the dramatic events occurring in the yard on November 6 may be summarized as follows: (1) A majority of the drivers had by October 26 designated the Union to represent them; (2) Respondent had recognized the Un- ion on October 31, and on the same date Allen had met with a union business agent and participated in an exploratory bargaining session; (3) Allen had made it clear from the outset that he believed the proposed master agreement to be an economic impossibility for his operation; (4) Allen had unlawfully interrogated and threatened drivers and made known to them his opposition to the Union and his fears of the economic consequences of the master agreement; (5) Allen, al- though apprised that Wasson lacked authority to deviate from the master agreement, had not acquired, or been told, that adjustments designed to meet the exigencies of his specialized type of business were impossible to negotiate; (6) Allen had not been told by the business agent, or anyone else, that failure to sign the master agreement would necessarily result in immediate economic action against him by the Union; (7) the drivers had unsuccessfully sought to discuss recognitional problems directly with Allen, but had made it clear to him that, although they were seeking help from the Union, they understood his economic situation and desired to negotiate a solution that would be economically suitable to it. 236 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Against such a background, we come to the confrontation of November 6. Al- len, who had been observing Wasson and three drivers sitting in a car in front of his terminal, met them as they entered the yard about 11 a.m. Allen denied Was- son's request that they go into his office to discuss a contract; he accused one of the drivels of instigating the Union and of trying to undermine his business; he refused to discuss further any aspect of the contract; he charged that Wasson was trying to force him out of business; and finally he announced that he was going out of business and terminated, not only the three drivers present, but all the drivers in the unit . The General Counsel contends that this conduct constitutes both an unlawful refusal to bargain and discrimination against the employees affected. I agree. The bargaining had barely commenced and it clearly had not reached a point of impasse. The Union had proposed that Allen sign a master contract, but there is no evidence at this point to establish that some adjustments designed to meet his need might not have been made. Indeed, considering later develop- ments, this no doubt might have occurred had not Allen taken action that effec- tively forestalled further exploration of the matter. Whatever apprehensions Allen may have had as to future developments, he was clearly not at this time confronted with an "either or" proposition, or with "an arbitrary demand" which pointed to the destruction of his business . Nevertheless, with the bargaining relationship still in its infancy, we see Allen, instead of fulfilling his duty "to meet at reasonable times and confer in good faith ...", putting the quietus on the whole bargaining process with the most drastic action possible, the termination of everyone in the unit. Respondent defends its action by referring to the alleged willingness of Allen to confer and discuss all aspects of the contract both before and after No- vember 6. It is true that, prior to November 6, Allen had discussed the contract and had explained his position in regard to it on the only occasion upon which he had been confronted with the opportunity to do so. His action on November 6, however, can hardly be characterized as evidencing any continuing willingness. On the contrary, as we have seen, it was both devastating and terminal. If bargaining were to continue thereafter , a destroyed relationship had to be rehabili- tated. Efforts in this regard will be considered below, but the significance of what happened on November 6, can neither be ignored nor underestimated. Respondent further defends its conduct by claiming that it was a justifiable bargaining tactic aimed at countering a demand of the Union which it regarded as totally unreasonable, and, that as such , the conduct was neither discriminatory nor in disregard of the statutory duty to bargain . Respondent, while acknowl- edging that the Board has consistently maintained that lockouts may be used as a bargaining weapon only in limited situations, urges that the Supreme Court and various Courts of Appeals have made it clear that lockouts are not unlawful per se, and that properly the lockout should be regarded as a corollary of the strike and permitted to be used in a variety of circumstances. Whether or not the Board might appropriately construe the statute to equate strikes and lockouts, it has not as yet chosen to do so. The Board , with court approval, has recognized that the right of employees to engage in concerted activities , including their right to bargain through their duly designated representative , may be limited by permit- ting an employer to take certain defensive action to protect its business against certain losses or inconveniences . Thus it has been held that an employer may lock out all of his employees when faced with a strike, or threatened strike where the purpose is to preserve multiemployer bargaining , or to prevent serious loss or inconvenience to the business or to the customers .10 Economic hardship may also justify temporary lockouts or refusals to reopen during a strike absent reasonable assurances of a measure of continuous operation." This privilege, however, does not exist when the lockout is used not for defensive purposes, but as an offensive weapon intended to force the abandonment of the Union's contract proposals In this type of situation the Board has consistently held that the use of a lockout weapon is coercion of employees in the exercise of their bargaining rights, is discrimination against such employees , and also constitutes the antithesis of 10 N.I. R.B. v Truck Drtrets Local Union No. 449, International Brotherhood of Team- sters, etc. (Buffalo Linen Supply Co ), 353 U S. 87; Betts Cadillac Olds, Inc., et at., 96 NLRB 268; Packard Bell Electronics Cot potation . 130 NLRB 1122; Building Contractors Association of Rockford, Inc. 138 NLRB 1405. "International Shoe Company, 93 NLRB 907; Duluth Bottling Association, et al., 48 NLRB 1335. NELSON B. ALLEN 237 good-faith bargaining.12 It is neither claimed nor does the record show, that the instant case falls within any of the so-called defensive exceptions. As we have seen, the lockout response of Allen came not after an impasse, but in the early stages of bargaining. He was not confronted with an immediate strike threat, or even the likelihood that one was imminent, if he declined to sign the master agreement. He was aware that his employees were seeking ways and means of making adjustments that would suit his operation. Although the master agree- ment was the only definite proposal that had yet been made, it was presented to him in a context in which further discussions were openly solicited. His lockout response was thus not dictated by any justifiable "defensive action." but stands simply as an "offensive" i esponse to the demands of a bargaining representative which he regarded as unacceptable. Within the rationale of the authorities above cited, such a response is unlawful and clearly violative of Section 8(a)(1), (3), and (5), and I so find. Respondent also argues that its conduct should not be found discriminatory because it was directed against everyone in the unit, and not just against union adherents. It urges that action encouraging or discouraging membership in a union is only unlawful when it is discriminatory, and this cannot be said to be true when the action is taken against everyone without regard to union affilia- tion. This misconceives the nature of the offense. Where a lockout is found to be a lawful defensive response, it would not be discriminatory unless it were applied to union adherents alone. This comes about because, although the act is clearly a coercive one directed against employees in the exercise of their bargaining rights, the Board has found that in balancing this against conflicting legitimate interests of the employer the interference is to be tolerated. However, in the case of an offensive lockout, there is no justification for an act of coercion aimed at employees for seeking to press their demands through their representative. A lockout under such circumstances is clearly discriminatory within the express language of the Act. I find that Respondent, on November 6, 1962, terminated the employment of all the drivers in its employ because they sought to exercise their bargaining rights through the Union, and that by such termination it coerced its employees in the exercise of their bargaining rights in violation of Section 8(a)(1) of the Act, it discriminated against such employees in violation of Section 8(a)(3) of the Act, and it refused to bargain with the Union within the meaning of Section 8(a)(5) of the Act. C. The offers of reinstatement and the bargaining subsequent to November 6, 1962 I have found Respondent's conduct on November 6, 1962, to be unlawful. Such unlawful conduct neither terminated the employment relationship nor extinguished the duty to bargain as a matter of law. On the contrary it created in Respondent an obligation to remedy its unfair labor practices by reinstating and making whole the drivers discriminated against, and by resuming its bargaining relation- ship and bargaining collectively in good faith with the Union. At the outset the picketing was to protest the terminations, and none of the drivers were strikers but all were discriminatees.1 i We must next determine how Respondent met the obli- gations imposed upon it as a result of its unfair labor practices, and ascertain what effect its subsequent conduct had upon any remedy which may be called for. 1. The alleged offers of reinstatement and the bargaining prior to December 24, 1962 Immediately after being infoi med of his termination because Allen was "out of business," Robert Brooks, a driver who had not signed a union card, undertook to 19The American Ship Building Coinpany, 142 NLRB 1362; Quaker State Oil Refining Corporation, 121 NLRB 384, enfd 270 F 2d 40 (CA. 3) , Utah Plumbing and Heating Contractors Association and its .ifembeis, 126 NLRB 973, enfd 294 F 2d 165 (CA. 10). 18 lespondent urges ilwt the drivers had planned to strike if a contract were not ob- tained, and that when the picketing commenced they were in reality economic strikers using the strike as it weapon to obtain this object. It may be assumed that they had organized with the hope of obtaining it contract. Expressions by certain of the witnesses indicate that they recognized that striking and picketing might become necessary if they were to achieve that objective However, as shown above, by November 6 they had not yet decided to take economic action. Respondent, by its unlawful conduct in "going out of business" and terminating the drivers on that date, made the drivers discriminatees, and their reinstatement thereatter became the primary issue. 238 DECISIONS OF NATIONAL LABOR RELATIONS BOARD find loads for Allen's trucks to haul. Brooks located three loads that Trucking Unlimited, a prime carrier, would make available for Allen on a subhaul basis. Brooks reported this to Allen who told Brooks that he would take this work if Brooks could obtain drivers. Brooks promptly agreed to take one of the loads himself and Pennington agreed to take another. There was discussion about the third load during the course of which Allen offered it to Lundy. Lundy, however, declined to take it, and thereupon joined the other drivers on the picket line.14 The third load was eventually assigned to driver Gene Creech, and Brooks, Penning- ton, and Creech took out the three Trucking Unlimited loads on November 7. Records of Respondent show that one additional load was taken out on Novem- ber 9 by a driver not previously in Respondent's employ. Records also show that during the following week 12 loads were taken out. Brooks and Creech each took loads, but the others were carried by newly hired drivers. Business in this week resumed at a level comparable to that of the week just preceding the union demand. There is nothing further in the record to show that Respondent's busi- ness did not thereafter continue at substantially the same level. After Brooks and Pennington had been assigned to two of the Trucking Un- limited loads, they left the terminal and proceeded to Hul's Restaurant. According to Brooks, Allen had told him that "he could go ahead and see if some of the fellows wanted to go and take trips." At Hul's Restaurant they met Beauchamp and Rowley, and engaged in a discussion with them which lasted for about 30 minutes. Brooks states that during the course of this conversation he told Beau- champ and Rowley about the Trucking Unlimited loads, and stated that he was acting for Allen in offering them an opportunity to take them. Beauchamp and Rowley deny that Brooks made a definite offer, either of a specific load or of other general employment. 1 am convinced that their recollection more accurately reflects what happened at this time. Brooks, himself, testified that he represented to Beauchamp and Rowley that none of the Trucking Unlimited loads had been assigned. He is clearly confused in this, however, for Respondent's witness Penn- ington is quite definite that Allen had assigned him and Brooks two of the three loads before they left together for Hul's Restaurant. Pennington's testimony is not disputed by Allen. Allen, himself, does not assert that he gave Brooks author- ity to do more than notify drivers of the availability of the Trucking Unlimited loads. No claim is made that he authorized Brooks to offer general reinstatement to Beauchamp, Rowley, or anyone else. There can be no doubt that the four drivers fully discussed questions concerning everyone's returning to work and undoubtedly Brooks made Beauchamp and Rowley aware that one Trucking Un- limited load was still available. It was Allen, however, who was making the as- signment, and there is nothing to show that at this time he had not already assigned this third load. Moreover, even if we construe the offer to be definite and positive with regard to the Trucking Unlimited load, it can hardly be characterized as an offer of reinstatement to Beauchamp and Rowley to their former jobs. On or about November 8, Allen, acting through his son, Robert, asked driver Graham, who was at the time on the picket line, if he wanted to take out a load. Graham replied that he "would like to" but that he "couldn't go through this picket line." Several informal conversations occurred between Allen and various drivers on the picket line. Respondent urges that during the course of these Allen made it clear to the diivers that they might have been working all the time, and that they consistently responded to him that they were unwilling to come back to work without a contract.55 Allen's reference appears to have been to the so-called offers 14 Lundy admits to being present at the terminal when Brooks discussed the Trucking Unlimited loads with Allen. Ile denies, however, that he was definitely offered one of the loads Witnesses Allen, Brooks, Skeen, Pennington, and Robert Allen each testified, consistently, that Lundy was offered a load and that he declined. This whole episode took place in the course of a general discussion occurring among a number of people. Lundy was at the time somewhat perplexed as to what course he had best pursue, and may not have clearly understood all that was taking place. I am convinced, however, that be is mistaken in his denial, and find that Allen made it known to Lundy that he might take one of the loads. 10 Respondent would attach significance to these alleged statements as showing that at all times the drivers were staying out for the purpose of getting a contract. There is some question that the drivers actually made such assertions. Assuming, arguendo, that they did, however, I attach no significance to them. At the time they were discriminatees placed in that position by Allen, himself. Until Allen unconditionally offered them re- instatement their willingness to return without a contract cannot be tested. NELSON B. ALLEN 239 of reinstatement outlined above. I do not understand Respondent to be claiming that in any of these subsequent informal conversations Allen was undertaking to make independent unconditional offers of reinstatement without reference to the former so-called offers. On November 26, 1962, Allen posted a notice on a bulletin board in his office and on the wall of the outside of the house in a location which was approximately 15 or 20 feet trom the place in the street where the drivers were picketing. This notice listed the names of all of the drivers in the unit and reads as follows: The picket line out front does not mean we are out of business. Each of you are free to come back to work provided there is work available at the time you decide to return. Many of you have refused work, so we are not going to continue to ask individually . Anyone that would like to return , please advise in person or by telephone. The pickets did not normally come on the terminal property , and they testified unanimously that no one of them had seen the posted notice. On December 4, 1962, Allen's son, Robert, delivered to Frederitz, Beauchamp, Rowley, and Hin- richs, who were at the time on the picket line , copies of the above notice together with a covering letter which read: Attached hereto is a copy of a notice which was posted on the bulletin board and on the front of the office building on November 26, 1962. Since we still have not heard from you we assume you still do not wish to return to work. No driver responded to this letter. Between November 6, 1962 , and January 2, 1963, no formal bargaining meet- ings between Respondent and the Union were either scheduled or held . Two infor- mal encounters occurred in December. On one occasion Allen met with Wasson, by chance , in front of the terminal. Wasson suggested that they should sit down "and get an agreement signed and get the men back to work." According to Wasson, Allen replied that "at the time he couldn 't see it." No further discussion ensued . On another occasion Allen met with "Salty" Dykes, president of the Un- ion. The meeting took place in a cocktail lounge, and was arranged by a sup- plier of Allen who had experienced difficulties in making a delivery behind the picket line. In response to a statement by Allen that he could not afford the master agreement, Dykes, according to Allen, indicated that then Allen should get a better class of business, and that in the event he could not then the Union intended to put him out of business . Allen inquired if a "variation in the contract, any possible chance of a percentage arrangement or anything like that might be worked out." Dykes responded that it could not. 2. Conclusions as to the offers of reinstatement and the bargaining prior to December 24, 1962 Respondent urges that by the oral offers of the Trucking Unlimited loads to Lundy, Beauchamp, and Rowley, by the offer of a load to Graham, by the informal discussions about work availability between Allen and Beauchamp , Rowley, and Hinrichs, and finally by the notices of November 26, it had made valid offers of reinstatement to the drivers . Thus it is urged that even if a discriminatory lockout be found, Respondent effectively remedied its unlawful conduct, at least to the extent of cutting off further backpay liability. The record will not support this contention. I have found that Allen did offer Lundy one of the Trucking Unlimited loads on November 7. I do not, however, regard this as an unconditional offer to his former job. Only the day before Lundy had been told by Allen that he was "out of business." Allen did not announce to Lundy, or anyone else, on November 7 that he was resuming business , but merely stated that if Brooks could get drivers he was prepared to handle the three loads that Brooks had located . Allen made no attempt to assure Lundy that hauling a Trucking Unlimited load was tantamount to reinstatement to his former job. As a discriminatee, Lundy was entitled to such assurance if the offer is to be considered a valid one .16 The so-called offers of the 10 Although the record is not entirely clear on the question, there is some indication that Respondent is claiming that Graham , who was also present at the terminal when the Trucking Unlimited loads were under discussion , was also offered one of them Even assuming this to be so there is nothing to indicate that he was given any more assurance than Lundy , and thus for the same reason any offer made to Graham at this time could not be considered a valid one 240 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Trucking Unlimited loads to Beauchamp and Rowley were even more ten- uous. As we have already seen, there is some doubt that any real offers were actually made, but even assuming that they were, there is nothing which would indicate a type of offer that could reasonably be construed as an unconditional offer of full reinstatement. The offer of a load to Graham on November 8, while clearly made, was similar to the offer to Lundy on November 7, in that it likewise carried no assurance that Graham was being offered his former job, and thus for the same reason it is also defective. The informal discussions between Allen and Beau- champ, Rowley, and Hinrichs are not even urged as unconditional offers, but appear to constitute merely affirmations of the earlier defective offers The same may be said for the notices posted on November 26 and subsequently delivered to four of the drivers. They do not speak in terms of an unconditional offer to return to former jobs, but purport only to affirm that although the drivers had heretofore turned down jobs, if any were still remaining the drivers would be permitted to apply for them. I find that between November 6 and December 24, 1962, Allen made no valid offers of reinstatement to any of his drivers. With respect to the bargaining during this period Respondent contends that the informal meetings between Wasson and Dykes, in which these representatives al- legedly had insisted that Allen sign the master agreement no matter what the cost, are further evidence of the Union's adamant position and of Allen's willingness to discuss matters. This overlooks the fact that it was Allen, not the Union, who broke off the negotiations on November 6. As a result of this conduct the issue of the reinstatement of the drivers became a primary and an overriding considera- tion. Even so we find Wasson framing his proposal in terms of a further discus- sion, and Allen once again declining to put the matter to a test to ascertain how far the Union was really prepared to go. The meeting with Dykes can hardly be regarded as definitive considering the posture of the case at that time which resulted from Allen's unfair labor practices. An informal encounter in a cocktail lounge with a man who was not the union negotiator, and in which only a general discussion ensued seems to add little to the bargaining picture one way or the other. I find that between November 6 and December 24, 1962, Respondent took no steps toward the fulfillment of his duty to bargain with the Union. 3. The offers of reinstatement and the bargaining subsequent to December 24, 1962 As a result of the charges filed by the Union in this proceeding, a proposed Board settlement was signed by Respondent on December 21, 1962. It provided, in substance, that Allen would offer reinstatement to Frederitz, Beauchamp, Row- ley, Graham, Hinrichs, and Lundy, and make each whole, and bargain collectively with the Union. Although at the time this proposed settlement had not been signed by the Union or approved by the Regional Director, Allen, on Decem- ber 24, 1962, sent letters to each of the drivers named in the agreement reading as follows: 17 Pursuant to Settlement Agreement executed at the National Labor Relations Board office in Los Angeles, California, on December 21, 1962, I am offering you complete reinstatement of your former employment as a driver. If you desire to return to work, please advise me at the address below indicating your wish to return to work, Said desire to return to work shall be communicated to me on or before close of business day on December 31, 1962. Upon receipt of your answer in the affirmative I shall place your name on a hiring list in order of your seniority as of November 6, 1962 so as to employ you under the same conditions and circumstances of said date and prior thereto. These letters were sent to, and received by, all six of the drivers. It is undisputed that within the prescribed time limit Beauchamp, Rowley, Graham, and Hinrichs each notified Respondent that he desired to be reinstated. On Saturday, December 29, Frederitz, accompanied by Beauchamp and Rowley, went to Respondent's ter- minal because they thought "it was a good time to go down and let [Allen] know [they] was willing to go back to work ..." and to "talk over even any differences 17 This settlement agreeniciit was never signed by the Union It was later approved by the Regional Director on January 28, 1963, but subsequently was set aside by the General Counsel prior to the issuance of the complaint in this proceeding NELSON B. ALLEN 241 [they] might have ... ' Lundy was to join them , but he was late, and was not with them when they arrived at the terminal . Nelson Allen was not present when they arrived . They told his son, Robert Allen, the purpose of their visit and he handed them ceitain employment application forms to be filled out. The drivers questioned him about the need for such forms, but Robert Allen only replied that he was acting at his father's instructions . After some discussion they departed with the applications. Before departing Frederitz stated to Robert Allen that he wished to be reinstated and that in the event his father wished him to take a load he should call him. is The drivers' concern about the applications stemmed from the fact that most had filled out similar applications and they felt the requirement might, in some way, reflect upon their seniority status as reinstated em- ployees. They went directly to Hul's Restaurant where they met Lundy who had been late in getting to the terminal . They told Lundy that Nelson Allen was not at the terminal and showed him the applications . After some discussion they decided that with the weekend and holiday intervening before the next workday, and with the Union scheduled to meet with Allen on that day, it would be best to report the matter of the applications to the Union , and to let the business agents take up the reinstatement problem with Allen at the negotiation meeting. As a result of this decision, Lundy did not go to the terminal or otherwise notify Allen that he wished to return. The scheduled negotiation meeting between Allen and the Union took place on January 2, 1962. At this meeting the Union was represented by Clyde Yandell and Barney Bernard.") At the outset of the meeting Yandell asked Allen about taking back the six drivers . Allen replied that he was ready "to take four of them back, but not two." Allen asserted that Frederitz and Lundy had not asked for their jobs back within the December 31 time limit required by his letter. Yandell replied that Frederitz had come to the plant on December 29, and that Lundy had failed to report on the same day only after learning of the confusion concerning the application blanks. Allen explained to Yandell that he had sought the applica- tion blanks only to complete his records , that he desired them only from those drivers who did not have similar applications already on file, and that he had never intended that they should condition or adversely affect reinstatement rights. Allen and Yandell discussed the reinstatement of Frederitz and Lundy at some length, and Allen said that another reason for refusing to take them back was "that Lundy and Fredeiitz had made faces at him from the road and that they were trouble makers." The statement is not denied by Allen. There was some discussion of union contract, and Allen repeated to Yandell the assertion he had made earlier to Wasson, that his business was not such that he could afford the master agreement. Yandell proposed no other agreement at the time, but explained to Allen that it might be possible that the Union could waive health, welfare, and pension benefits. The meeting was adjourned with the understanding that Yandell would take up the possibility of such concessions with higher union officials, that he would report back to Allen what the men had decided to do as a result of his refusal to take back Frederitz and Lundy , and that they would later schedule another negotiation meeting. "There is some conflict in the testimony on this point. Robert Allen testified that Frederitz asked him if lie "was assuming that [Frederitz ] was coining back to work" and that "[lie ] said no " Allen slated that it was in reliance upon Robert Allen's report to this effect that lie later concluded that Frederitz had not signified his intent to return to work within the time limit prescribed by the letter Robert Allen was less than 20 years old at the time of these incidents The drivers displayed a vociferous concern about the meaning of the applications and subjected Robert to a barrage of questions about them He did not fully understand their purpose, and could only reply that his father had instructed Jilin to give lheni to any driver reporting. All three drivers were emphatic that Frederitz made it quite clear that he was responding to the letter and seeking reinstatement. Indeed, this appears to have been the only purpose of it visit by any of the drivers to the terminal on that day I ant satisfied that Frederitz did make known his athrntative response to the job offer, that Robert Allen became contused, misinterpreted some of his expressions of concein about the applications, and subsequently passed on his contusion and misinterpre- tation to his father. 19 Business Agent Wasson had been replaced by Yandell as a result of a union election in December 1962, and Yandell, now assisted by another business agent, Bernard , had taken over Wasson's role in the negotiations with Allen 770-076-65-vol. 149-17 242 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Yandell and Bernard went from the terminal to Hul's Restaurant where they met with some of the drivers 20 Yandell told the drivers of Allen's position with regard to bargaining, the applications, and the reinstatement of Frederitz and Lundy. The drivers agreed that none of them would return to work unless Freder- itz and Lundy were also taken back, and that if they had not been taken back by the following Sunday picketing would be resumed. According to Yandell he reported this decision of the drivers by telephone to Allen.' When Allen failed to call Frederitz and Lundy by the next Sunday January 6, the picketing was resumed. Melvin Graham did not join the others, but returned to work on or about January 6. Apparently because of the intervention of the Board, Allen reversed his position as to Frederitz and Lundy, and by January 23 sent to both renewed unconditional offers of reinstatement. Both declined to return, advising Allen, in substance, that they would not then go back without a union contract. Renewed unconditional offers were also made to Beauchamp, Rowley, and Hinrichs, and they too declined to come back without a union contract 22 The next bargaining meeting was held on January 24, 1963. William Fon- taine, organizer for the Western Conference of Teamsters, appeared and acted as spokesman for the Union. Fontaine had more authority than either Wasson or Yandell and was empowered to negotiate a contract making concessions de- signed to cover specialized types of business such as Allen's. In a meeting which lasted over 5 hours all phases of Allen's operation were fully discussed. Fontaine acknowledged that the master agreement was designed for common carriers and was not suited to special subhaul carriers such as Allen. He agreed that it would be necessary to draft a special agreement adapted to the character of Allen's business. The Union appears to have accepted Allen's representation as to the nature and volume of his business, for it made no request to inspect his books. According to Allen, during the course of this meeting he asked "if there wasn't any arrangement such as a percentage that would-in other words, allow us to kind of share in the profit...." The record is not clear exactly what Allen meant by a percentage arrangement, and Fontaine makes no reference to this proposal in his testimony. In any event it appears never to have been discussed. The meeting concluded with the understanding that Fontaine, now fully apprised of Allen's problems, undertake to draw up a new agreement tailored to fit them, which would thereafter be submitted to Allen and would serve as the basis for discussion at a later meeting. 20 Frederitz, Beauchamp, and Lundy were at the restaurant when Yandell and Bernard got there. Rowley was out on a trip and did not return until the next day. Hinrichs was still In Oregon, but he had told the others that he would go along with whatever they decided. Graham did not come to Hul's restaurant until the meeting was nearly com- pleted, and he did not hear the report from Yandell and Bernard. 21 Allen and his son, Robert, who listened In on this telephone call, testified that Yandell informed them that the men were refusing to return without a union contract. I credit Yandell's version in this regard The drivers present at the meeting not only testified consistently that they were conditioning their return upon Frederitz and Lundy also going back, but this position is more consistent with other events occurring at the time. Bargain- ing had only just resumed, and although the drivers had been told that Allen had not signed an agreement, they were also told that further meetings were to be held On the other hand, only a few days before, all the drivers had signified their intention to return They were aware that Frederitz had actually reported to the terminal within the required time period and signified that he wanted to go back. They knew that Lundy had withheld going to the plant only because of the confusion brought about by the Respondent's apparent in- sistence upon the applications It is thus understandable that upon learning that Allen was refusing to take back either Frederitz or Lundy they should have some question as to his good faith in taking any of them back. Under all the circumstances, I am convinced and find that the drivers refused to return to work at this time because Allen declined to reinstate Frederitz and Lundy, and not because they were refusing to go back without a contract. I further find that Yandell reported this fact to Allen in the telephone conversation "The offers to Beauchamp and Bowley were oral, and they were made aware that Frederitz and Lundy had received renewed offers and that filling out the application forms was not a condition precedent to return. Hinrichs, who was still in Oregon, received an offer by letter. Although he had replied in the affirmative to the earlier offer, he did not reply to this one. He had previously taken the position that he was going along with any action the men took. Since they all declined to return at this time unless a union contract were signed, I assume that Hinrichs likewise joined with them in this position. NELSON B. ALLEN 243 Fontaine subsequently prepared a special contract, submitted it to Allen, and later met with him on February 19. This meeting lasted approximately 3ih hours. Allen accepted, without argument, the noncost items in the proposal, but no agreement was reached as to any cost item This new union proposal differed from the master agreement ptincipally in that it eliminated the health and welfare provisions, piovidcd for an hourly wage scale lower than that in the master agree- ment, and eliminated a pay scale based on mileage. It did, however, provide for an 8-hour minimum payment and for vacation and holiday pay while Allen was then paying a 4-hour minimum and no vacation or holiday pay. The undisputed evidence regarding the cost of a typical trip is that under Allen's then current practice, it would cost approximately $92, while under the special agreement it would have cost approximately $122. While acknowledging that this was sub- stantially less than the full costs under the master agreement, Allen contended that even with the ieduction the cost figures were still too high for the type of business in which he was engaged.= S Fontaine although stating that Allen made no written counterproposals at either meeting cannot recall if he made any oral pro- posals. The February 19 meeting adjourned with the understanding that Allen was to think the matter over for a period of from 30 to 60 days. Fontaine states that he asked Allen to let him know if during this period any developments took place which would make it possible for him to accept the contract, and that Allen agreed to do so. Allen denied eithei such request or his agreement. In any event Allen never called the Union, but approximately 2 weeks after this meeting Fontaine called Allen on the telephone During the course of this conversation Allen in- formed Fontaine that things had not changed and that he still did not regard it as economically possible fot him to accept the proposed contract. There is no showing, or claim made, that these was any understanding or agreement as to furthet communications between Allen and the Union. There is nothing to show that the character of Allen's business thereafter changed in a manner that might make that pioposal acceptable Thereafter Allen made no further efforts to com- municate with the Union, not did the Union undertake to communicate further with hi n. The picketing ceased in early Fe"-.t nary and has never been resumed. 4. Concluding findings as to the offers of reinstatement and bargaining subsequent to December 24, 1962 We must next examine the significance of the reinstatement offers made on December 24, and consider whether or not Respondent fulfilled its statutory duty to bargain in the meetings with the Union following January 2, 1963. The General Counsel, appears to claim that no valid offers of reinstatement were made. Respondent urges that the letters of December 24 clearly constitute valid offers of reinstatement. The General Counsel also contends that Respondent in addition to its conduct on November 6, 1964, heretofore found to have constituted a refusal to bargain, at all times thereafter followed a continued pattern of bad- faith bargaining which must be remedied by a bargaining order Respondent claims that even if its November 6 conduct be found a refusal to bargain, it was thereafter remedied by the bargaining subsequent to January 2, 1963, and that no remedial bargaining oider is called for The letters of December 24, by their terms, and resulting, as they did, from a proposed Board settlement appear, on their face, to constitute valid offers of rein- statement to the six drivers. 21 Respondent will be absolved of further backpay 23 The estima(es made of Allen's costs and profits stand unchallenged in the record. Annual costs computed under the piaster agreement would have been raised by approxi- mately $36,000. This figure would include approximately $7,000 per year allocated to health, welfare, and pension costs. Additional reductions brought about by the special agreement submitted by Fontaine would have reduced the annual increase to approximately $23,000. As we has e seen above Allen's net profit in 1002 was approximately $14,000 with no allowance being made for any salary for him 251 have found above that Respondent discriminated against all 11 drivers in the unit by the lockout of November 0. Neither Timmons nor Sharp were named in any charges or in the complaint. Pennington, Brooks, and Creech returned to work after the lockout, and later left Respondent's employ of their own volition. Except for Pennington , no one of them was named in any charge, and none were named in the complaint. The issue as to the discrimination against all in the unit was fully litigated However, I well make no remedial provision as to the five not named in the complaint since they have evidenced no desire to vindicate their rights In a Board proceeding. 244 DECISIONS OF NATIONAL LABOR RELATIONS BOARD liability as to all six of the drivers , unless it be found that by its own conduct it has interfered with the subsequent return to work of any of them. If so, its discriminatory conduct will continue unless further remedied. Graham subse- quently did return to work following the offer. I have found above that Frederitz signified his intent to return on December 29, 1962, within the time limit set forth in the offer. His failure to return thereafter came about because of Allen's mis- placed reliance upon the representations of his son concerning Frederitz' statements when he came to the terminal. Lundy did not actually report to the terminal on that day, but he intended to do so, and his failure came about solely because of the confusion created by Allen in regard to the application blanks. The entire situation was made clear to Allen by Yandell at the bargaining meeting taking place on January 2 the next business day following the appearance of the drivers at the terminal . Allen's continued refusal in the face of Yandell's urging that he take the drivers back, as well as his undenied remark that he regarded them as troublemakers, casts doubt on Allen's good faith and makes it appear that he was seeking for excuses not to reinstate them. Thus the failure of Frederitz and Lundy to return at this time comes about from Allen's conduct rather than their own. On January 23, however , Allen renewed his offers to Frederitz and Lundy. There is nothing to show that at that time the offers were not unconditional or that Allen placed obstacles in the way of their return. On the contrary, the record stands undisputed that at that time they declined to go back solely because Allen had not signed a union contract. I find, therefore that on or about January 23, 1963, Allen made valid offers of reinstatement to Frederitz and Lundy, and that they de- clined to return without a union contract and that from that time on their status changed from that of discriminatees to that of strikers. Insofar as the record shows, Allen was prepared to put Beauchamp , Rowley, Hinrichs, and Graham to work following their response to his December 24 offer. Graham, as we have seen actually did return. Beauchamp, Rowley, and Hinrichs, however, remained out to protest Respondent's continuing unfair labor practices as to Frederitz and Lundy. I find that on December 24, 1962, Respondent made valid offers of reinstatement to Beauchamp , Rowley, Hinrichs, and Graham, and that thereafter the status of those declining to return changed from that of dis- criminatees to that of strikers At this time they were striking to protest an unfair labor practice. On January 23, however, Respondent remedied the unfair labor practice as to Frederitz and Lundy by the renewed offers. Beauchamp, Rowley, and Hinrichs , although also receiving renewed offers , refused to go back unless Respondent signed a union contract , and continued to strike after that time for that purpose. The bargaining after January 2, 1963, takes on an entirely different character from that which preceded it Allen continued to insist that he could not afford even the scaled down costs of the special contract . However, I am of the opinion that his conduct at these meetings sounds more in terms of an economic impasse than in derogation of his statutory bargaining duty. We are not necessarily required to carry over the element of bad faith which characterized Allen's original explosive response to the Union's bargaining requests on November 6. A discrim- inatory lockout has been described as the "antithesis of good faith bargaining, and in a sense it is. But in the instant case it appears to have come about more as an emotional reaction to demands regarded as devastating, than from a planned and calculated effort to evade the bargaining duty altogether. While the effect on the employees was disastrous and their rights must be vindicated, and while the earlier efforts at rehabilitation of the bargaining relationship were both casual and insufficient, it does not follow as a matter of course that rehabilitation must remain forever an impossibility . By January 23, 1963, all of the reinstate- ment problems had been resolved , and those who desired it had returned to the Respondent's employ. Those remaining out thereafter did so to press for a union contract. The way had been cleared for the parties to come together at the bargaining table. The ensuing meetings were comprehensive, and Allen's appre- hensions had been quieted by the knowledge that he was then dealing with a representative authorized to make concessions . Allen disclosed all the information about his business which was requested , and his entire operations were discussed to the fullest possible extent . The Union freely conceded that the master agreement was not suited to Allen's business , and came forth at the next meeting with its own special contract proposal. The reduced costs of even this agreement do not appear to allow Allen a profit upon the basis of the only figures appearing in this record. Thus his continued adherence to his economic position does not lack foun- dation or necessarily manifest a fixed and determined effort not to reach an agree- NELSON B. ALLEN 245 ment. Allen's so-called percentage proposal, while not discussed by the Union, is in the nature of a counterproposal and conceivably might have served as the basis for an acceptable agreement. It is not clear that Allen had bound himself to communicate further with the Union following the February 19 meeting At the most it appears that he was to call the Union if some changes in his business came about that would make the union proposal more acceptable Moreover, although he did not subsequently call the Union he did have occasion to speak with Fontaine subsequent to this meeting and did inform him at the time that no such changes had come about. The attitude of the Union, in abandoning the picketing and making no further efforts to reach Allen, suggests that it too may have accepted the fact that even the special contract could not be supported by Allen's busi- ness. I am convinced , and find, that regardless of his past unfair labor practices, Allen undertook in good faith to remedy them by the offers of reinstatement and by the bargaining. Accordingly, I find that commencing on January 2, 1963, Allen resumed a bargaining relationship with the Union, that by his conduct thereafter he demonstrated a willingness to fulfill his statutory duty to bargain, that the failure to reach an agreement with the Union resulted from an economic impasse, and that under the circumstances a remedial bargaining order is not presently required. There remains the question of the status of the strikers. I have already found that prior to the December 24 offer, all of the drivers were discriminatees, not strikers, and picketing was to protest their discriminatory lockout. The refusal of Beauchamp, Rowley, and Hinrichs to return after the offer was a protest against the continued unfair, labor practices relating to Frederitz and Lundy. However, since they had received valid offers of reinstatement they lost their status as discrim- inatees and became unfair labor practice strikers After January 23 when valid offers had been made to all, however , all remained on strike to seek a con- tract. Their status thus would change from unfair labor practice strikers, to eco- nomic strikers , unless it can be said that in pursuing such objective they were pro- testing an unlawful refusal to bargain. Since I have found that Respondent was, by this time, meeting its statutory bargaining obligation, I must conclude that the continuing strike is for an economic object, and that the drivers who remained away became economic strikers. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent as set forth in section III, above, occurring in connection with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices violative of Section 8(a)(1), (3), and (5) of the Act, I shall recommend below that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent discriminatorily locked out all drivers in the bargaining unit who are named on the complaint on November 6, 1962, and having further found that Respondent subsequently made valid offers of reinstate- ment to each of them, I will recommend that Respondent make each whole for any loss of earnings he may have suffered as a result of the discrimination against him by payment to him of a sum of money equal to the amount of wages he would have earned from the date of the discrimination to the date of the offer of reinstate- ment, together with interest thereon at a rate of 6 percent per annum, and that the loss of pay and interest be,-computed in accordance with the formula and method prescribed by the Board in F. W. Woolworth Company, 90 NLRB 289, and Isis Plumbing and Heating Co., 138 NLRB 716, to which the parties hereto are expressly referred. Although I have found that Respondent engaged in conduct violative of Section 8(a)(5) of the Act, I recommend no affirmative bargaining order, inasmuch as I have also found that Respondent by its subsequent bargaining with the Union has already met its statutory duty to bargain. The unfair labor practices committed by Respondent strike at the heart of the rights guaranteed employees by Section 7 of the Act.25 The inference is warrant- 25 N L.R B. v. Entwistle Mfg. Co., 120 F. 2d 532 (C.A. 4). 246 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ed that Respondent maintains an attitude of opposition to the purposes of the Act with respect to the protection of employee rights in general. It will, accordingly, be recommended that Respondent cease and desist from infringing, in any manner upon the rights guaranteed in Section 7 of the Act.26 Upon the basis of the foregoing findings of fact, and upon the entire record in this proceeding, I make the following: CONCLUSIONS OF LAW 1. Nelson B. Allen is, and has been at all material times, an employer within the meaning of Section 2(2) of the Act. 2. Line Drivers Local 224, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is, and has been at all material times, a labor organization within the meaning of Section 2(5) of the Act. 3. All truckdrivers employed by Respondent, excluding all other employees, office clerical employees, guards, professional employees, and supervisors as defined by the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Line Drivers Local 224, affiliated with International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, has been at all times since October 26, 1962, the exclusive representative of employees in the unit described in paragraph 3 within the meaning of Section 9(a) of the Act. 5. By the termination of all employees in the unit described in paragraph 3, above, on November 6, 1962, Respondent has engaged in unfair labor practices within the meaning of Section 8(a) (3) of the Act. 6. By the termination of all the employees in the unit described in paragraph 3, above, on November 6, 1962, because they undertook to bargain through the Union, Respondent has refused to bargain collectively with the Union, and has engaged in unfair labor practices within the meaning of Section 8(a)(5) of the Act 7. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed them by Section 7 of the Act, as found above, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Sections 2(6) and 2(7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in this proceeding, I recommend that the Respondent, Nelson B. Allen, its agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discouraging membership of any of its employees in Line Drivers Local 224, affiliated with International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, or any other labor organization, by discrimi- natorily locking out, discharging, terminating, laying off, or in any other manner discriminating against any individual in regard to his hire, tenure of employ- tttent, or any term or condition of employment, except as authorized in Section 8(a) (3) of the Act. (b) Refusing to bargain with Line Drivers Local 224, affiliated with Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica, by locking out, discharging, terminating, or laying off any of its employees because they undertake to bargain through their duly designated bargaining representative. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of their rights to self-organization, to form labor organizations, to join or assist the above-named or any other labor organization, to bargain col- lectively through representatives of their own choosing, or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a)(3) of the Act. May Department Store d/b/a Famous-Barr Company v. N.L.R. B.,•326 U.S. 876; Bethlehem Steel Company v. N.L R.B., 120 F. 2d 641 (C.A D.C.). NELSON B. ALLEN 247 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Make whole Claude Beauchamp, John Frederitz, Melvin Graham, Richard Hinrichs, Kenneth Lundy, and Roland Rowley for any loss of pay each may have suffered by reason of the discrimination against him, in the manner provided in the section entitled "The Remedy." (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to an analysis of the amount of backpay due. (c) Post at its usual place of business, copies of the attached notice marked "Appendix A."' Copies of said notice, to be furnished by the Regional Director for Region 21 of the National Labor Relations Board, shall, after being signed by Respondent, be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all the places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 21, in writing, within 20 days from the receipt by Respondent of a copy of this Decision, what steps Respondent has taken to comply therewith.' It is further recommended that unless on or before 20 days from the date of its receipt of this Trial Examiner's Decision Respondent notify the Regional Direc- tor that he will comply with the foiegoing Recommended Order, the National Labor Relations Board issue an order requiring Respondent to take the action aforesaid. 27 In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be snhstituted for the words "the Recommended Order of a Trial Examiner" in the notice In the additional event that the Board's Order is enforced by a decree of a Untied States Conrt of Appeals, the words "a Decree of the United States Court of Appeals, T:nforciu¢ an Order" shall be substituted for the words "a Dec sion and Order " 28 In the event that Iluo Recmnniended Order is adopted by the Board, paragraph 2(d) thereof shall be modified to read' "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply therewith " APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT discourage membeiship in or activities on behalf of Line Drivers Local 224, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ametica, or any other labor or- ganization of our employees, by discriminatorily locking out, discharging, terminating, laying off, or in any other manner discriminating against any individual in regard to his hire or tenure of employment or any term or condition of employment, except as authorized in Section 8(a)(3) of the Act. WE HAVE already offered reinstatement to, and we will make whole, Claude Beauchamp, John Frederitz, Melvin Graham, Richard Hinrichs, Kenneth Lundy, and Ronald Rowley for any loss of earnings they may have suffered as a result of the discrimination against them. WE WILL NOT refuse to bargain with Line Drivers Local 224, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, by locking out, discharging, terminating, or laying off any of our employees because they undertake to bargain through this or any other labor organization. WE WILL NOT in any manner interfere with, restrain, or coerce our em- ployees in the exercise of their right to self-organization, to form labor or- ganizations, to join or assist the above-named Union, or any other labor or- ganization, to bargain collectively through representatives of their own choosing, or to engage in other concerted activities for the purpose of collec- tive bargaining or other mutual aid or protection, or to refrain from any or 248 DECISIONS OF NATIONAL LABOR RELATIONS BOARD all such activities , except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the Act. All our employees are free to become or remain, or refrain from becoming or remaining, members of the above-named Union or any other labor organization. NELSON B. ALLEN, Employer. Dated------------------- By-------------•------------------------------ (Representative ) ( Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. Information regarding the provisions of this notice and compliance with its terms may be secured from the Board's Regional Office , 849 South Broadway, Los Angeles, California, Telephone No. 688-5204. J. A. Terteling & Sons, Inc. d/b/a Western Equipment Company and International Union of Operating Engineers , Local 370, AFL-CIO. Cases Nos. 19-CA-2736-1 and 19-CA-2736-2. Octo- ber 29, 1964 DECISION AND ORDER On June 22, 1964, Trial Examiner Martin S. Bennett issued his Decision in the above-entitled proceeding, finding that the Respond- ent had engaged in and was engaging in certain unfair labor prac- tices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in his attached Decision. Thereafter the Respondent filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Leedom, Fanning, and Brown]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the following modifications.' In adopting the Trial Examiner's finding that Respondent vio- lated its obligation to bargain in good faith, we have not relied solely upon the position taken by Respondent on substantive contract terms. Rather we have considered the totality of circumstances in assessing Respondent's attitude towards collective bargaining. And on the basis of Respondent's overall course of conduct we are persuaded that Respondent approached the bargaining table not with the sincere ' In the absence of exceptions thereto, we adopt pro forma the Trial Examiner's conclu- sion that the proof fails to establish that Respondent engaged in independent violations of Section 8(a)(1). 149 NLRB No. 28.